This week's major focus for investors will be inflation data, with the producer price index expected to be announced today and the consumer price index slated to be published tomorrow. Inflation is anticipated to have reached its greatest level in thirty years as a result of increased energy costs and supply chain bottlenecks. Both the producer and consumer pricing indexes are expected to have risen 0.6 percent month on month in October.
Nonetheless, the S&P 500's growth prospects remain high, boosted by excellent corporate earnings in the third quarter, which surged 40% year on year. As a result, rather than being concerned about growing inflation, stock dealers are attempting to profit.
Furthermore, encouraging news has flooded markets in recent days, including the ratification of a $550 billion infrastructure program at a time when the Federal Reserve is set to begin unwinding its previous stimulus measures. This move by Washington has helped to allay market concerns that the reduction of quantitative easing measures, along with quickly rising consumer prices, will stifle economic development. This is because infrastructure expenditure is crucial since it increases a country's potential to be more productive and generate a favourable return on investment in the coming years. As a result, the industrial sector of the S&P 500 finished at all-time highs.
Furthermore, Pfizer's (NYSE:PFE) COVID-19 pill and the lifting of travel restrictions in the United States have increased market confidence that businesses would continue strong corporate profitability in the fourth quarter.